What Buyers Really Want: What Does the Data Tell Us?

What Buyers Really Want: What Does the Data Tell Us?
By Marc Gould
RISMEDIA, Thursday, August 01, 2013—

If data is the currency of the new economy, then the National Association of REALTORS® is flush with it, based on the recent release of the National Association of REALTORS® Profile of Home Buyers and Sellers 2012. This annual survey of more than 5,700 respondents offers us ample information about home buyers, and enables us to draw some conclusions about what they’re looking for in a home. Knowing the big picture trends makes us more attuned to market and home buyer behavior, and better able to meet home buyers’ needs. Here’s some of what I learned:

What matters most? The quality of the neighborhood, convenience to job, and overall affordability of homes are the top three factors influencing neighborhood choice – the same factors as the last two years. Overall, only 25 percent of survey respondents chose neighborhood based on the quality of the schools (down slightly from 27 percent). But, among families with children under 18 residing in the home, 46 percent choose based on school district quality, down from 55 percent last year, and 61 percent prioritize the quality of the neighborhood, down from 72 percent last year.

Tip: REALTORS® with their ABR® designation can take advantage of the Consumer One-Sheet “What Do You Want and Need in a Home?” when working with clients to pinpoint their priorities.

Hunkering down. Once the buyer is moved in to their newly purchased home, the typical buyer expects to live there for 15 years — the same outcome as last year — but up significantly from 2010, when the typical buyer expected to stay 10 years. Younger buyers (18-24 years old) expect to stay for the shortest tenure: five years.

Tip: With this longer tenure, it is important to help buyers make a choice that will suit their needs for the long haul, without having to rely on high-risk loans. ABR®s may find the Consumer One-Sheet, “Am I ready to buy?” useful when it comes to helping buyers’ assess their readiness to purchase a home and determine their future needs, particularly critical given that buyers are likely to be there a while.

Tighter credit. Many buyers are now facing tighter credit standards than seen in previous years. For this reason, the typical buyer profile has shifted over the past couple of years. For example, this year’s report displayed the highest share of married couples and the lowest share of single buyers since 2001.

Tip: With tight lending by financial institutions, buyers need to demonstrate higher levels of income to qualify for loans than in the past. The Consumer One-Sheet, “Calculating the True Cost of Homeownership” is a great tool to help buyers be aware of all the costs of owning a home and plan their finances accordingly.

Getting mortgages. While the share of home buyers reporting that the process of obtaining a mortgage is more difficult than expected is about the same as last year (40 percent) — it is higher than the figures reported in the 2009 and 2010 reports.

Tip: The Home Buyer’s Toolkit is another helpful ABR® tool, which walks consumers through 10 key steps for completing a successful transaction, including help with finding a qualified buyer’s rep, assessing credit and finances, evaluating wants and needs in a home, searching for a home, negotiating terms, obtaining a mortgage, etc.

Data is helpful at seeing the big picture. But at the end of the day, buyers come to us (and return repeatedly) for our knowledge of their local markets, and our instincts and experience as brokers and agents.

Get additional information and insights about today’s home buyers and their experiences with real estate transactions from the NAR Profile of Home Buyers and Sellers 2012, available at the REALTOR.org/Store. Additionally, Accredited Buyer’s Representative’s (ABR®s) have access to many business building tips and tools, such as the Consumer One-Sheets and the Home Buyer’s Toolkit, in the members area of REBAC.net.

Marc Gould is vice president, Business Specialties, for the National Association of REALTORS® and executive director of REBAC.

For more information, visit www.REBAC.net.

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